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Market Comment - October

October 2006

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

The Dow Jones Industrial index has caught the headlines as, at thetime of writing, it’s within a whisker of its all time high. But don’tget too carried away, as this index is largely irrelevant, focussing onjust 30 stocks. What is relevant for US and global investors and theirsentiment, is the performance of the more representative and widelytraded S&P 500 index. This has edged just above the May 2006 highbut remains 13% below the highs of March 2000.These numbers mask other facts. The fall in US house prices lastmonth was the first in a decade and the US bond market, as you mightexpect, responded positively, anticipating interest rate cuts in 2007to bolster an economy expected to endure a broadly based slowdown. Yetthe S& ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

All material on this website is protected by copyright. You may use Information retrieved from the www.scsw.co.uk website for your own personal non-commercial use which means that you may not sell or copy this information to any third party without prior written consent. ISSN 1358-183X

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